Steve Hughes: 'You'd be surprised how fast brands can scale now.'

Boulder Brands CEO: In 3-5 years there will be a bunch of $300-500m brands that you've never heard of today

By Elaine Watson

- Last updated on GMT

Boulder Brands CEO on Millennials, food trends and crossover brands

Related tags Whole foods

As the rapid growth of brands such as Suja Juice and Just Mayo demonstrates, new, on-trend brands originating in the natural, gourmet or organic space can now ‘cross over’ into the mass market at record speed, such that companies we have never heard of today could be generating revenues of $300-500m tomorrow, predicts Boulder Brands CEO Steve Hughes.

Hughes, who was speaking at a webinar hosted by New Hope Media's NEXT Accelerator on April 15, added: “You'd be surprised how fast brands can scale now. I think in three to five years there are going to be a bunch of $300m to $500m dollar companies and brands that you've never heard of today.

“The great brands of tomorrow, of the next generation, are on sale in stores like Whole Foods, Sprouts, and Earth Fare today.” ​And they are going to scale this rapidly in part because large conventional retailers need to replace sales that legacy brands are losing and stock more products that resonate with Millennials, he said.

Buzzwords: Authenticity, pure, simple, sprouted, fermented…

“Millennials are coming of age and their economic impact will be breathtaking… The next three to five years are going to be by far and away the most dynamic and exciting ​[for food and beverage] entrepreneurs that I’ve seen.

Steve Hughes Boulder Brands CEO
Steve Hughes: "The great brands of tomorrow, of the next generation, are on sale in stores like Whole Foods, Sprouts, and Earth Fare today.”

“If you look at how the large caps have spent the last 35 years destroying the health prospects of the consumers they are meant to serve… this has in part created a window of opportunity for the natural foods industry.”

And once you reach a critical mass in the natural channel, buyers at the large conventional retailers will be calling you, added Hughes, who said 'authenticity', 'pure', 'simple', 'sprouted', and 'fermented', were all growing trends. 

The meteoric rise of EVOL Foods 

evol slogan
Frozen food brand EVOL Foods [acquired by Boulder Brands in December 2013 with $17m in annual sales] generated sales of $50m in 2014 and could approach $100m in 2015, predicts Boulder Brands CEO Steve Hughes

As for Boulder Brands itself, he acknowledged that its Smart Balance brand – which appeals more to baby boomers - was struggling, and posting significant declines, but said other key brands in the portfolio (Earth Balance, Udi’s Gluten Free and EVOL) all appealed to 18-44 year olds, with EVOL in particular appealing to Millennials.

“One of our real focus points is how to buy and build brands… Earth Balance was doing $5m when we bought it and is approaching $70m this year; Glutino was doing $50m in 2011 when we bought it and is on course to do around $100m this year.

"Udi’s ​[Gluten Free] was doing $65m in 2012 and this year will be doing well north of $200m; and EVOL Foods ​[acquired in December 2013 with $17m in annual sales] did $50m last year and this year we hope will be approaching $100m.”

Boulder Brands posted a $127.1m net loss in 2014 compared with a $10.4m net profit in 2013. However, revenues were up 12% to $516.6m driven mainly by growth in EVOL Foods, Udi's and Earth Balance.

Hughes blamed the losses on a weak operating environment for buttery spreads (poor sales of Smart Balance), service issues in its natural segment, and higher costs for egg whites.

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UDI is on target

Posted by Barbara Glass,

UDI products, esp bagels and granola are the best around. Only a few other brands have developed good tasting, GF products. Kudo's to your team on the R&D, will be watching your company growth.

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Steve, your story is full of holes

Posted by Gloria Duy,

How about the fact that you don't listen to your customers? The fact that Udi's bread has been full of holes for 5 years and you are losing your customers. You also partner your gluten free buns with a fast food place that has no intentions of making their food gluten free. You are losing the celiac community.

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